Navistar loses $1.3M in second MaxxForce engine lawsuit

By Tyson Fisher, Land Line staff writer | 3/7/2019

Ohio-based trucking company Dutch Maid Logistics was awarded $1.3 million by an Ohio jury in a lawsuit against Navistar International and its defective MaxxForce engines. In 2017, a Tennessee court upheld a $30 million verdict in a separate lawsuit over the same issue.

On March 1, a jury in Newark, Ohio, awarded Dutch Maid Logistics $1.025 million in punitive damages and $275,000 in lost profits after finding Navistar guilty of fraud for concealing and not disclosing information on the sale of 20 International ProStar trucks equipped with defective MaxxForce engines, according to Miller Weisbrod, the law firm representing Dutch Maid. After attorney fees are factored in, the verdict could exceed $2 million.

This is the second lawsuit Navistar lost as a result of the faulty engines. In December 2017, a Tennessee judge upheld a jury’s decision to order Navistar to pay Milan, Tenn.-based trucking company Milan Supply Chain Solutions $30 million for the purchase of 243 International ProStar trucks.

Despite assurances of trucks in perfect working order, trucks purchased by Milan and Dutch Maid began experiencing issues not long afterwards. Specifically, the trucks experienced issues with the exhaust gas recirculation system, EGR coolers, EGR valves and other engine components.

According to the law firm, Navistar admitted during trial that it installed the MaxxForce engine after knowing about the issues. Navistar also admitted that these problems were not disclosed to customers.

Knowledge of the issue reached the top of the corporate ladder at Navistar. Emails to Navistar CEO Troy Clarke informed him that the senior vice president of engineering was well aware that the company did not validate the engine, claiming a lack of time for testing.

Navistar spokeswoman Lyndi McMillan told Land Line that the company is disappointed in the outcome and is evaluating legal options.

Milan lawsuit

Milan was forced to sell 25 of the 243 trucks. Milan also claims several other financial losses, including loss of profits, downtime expenses/losses, diminished resale value of trucks and towing expenses. Allegations include breach of warranty, breach of contract, fraud, negligent/intentional misrepresentation and violating the Tennessee Consumer Protection Act.

According to a news release from Miller Weisbrod, also Milan’s attorneys, several Navistar executives testified. One former senior vice president of North American sales said that Navistar “did not test s#@t.” Emails from the senior vice president of engineering to the CEO quote a former vice president of quality responsible for testing MaxxForce engines stating repeatedly that “we have no field testing.”

On Aug. 10, 2017, a jury found Navistar committed fraud and violated the Consumer Protection Act. Milan was awarded $10.8 million in actual damages, including more than $8.2 million in damages for diminished value and more than $2.5 million in lost profits. Additionally, the jury awarded the trucking company $20 million in punitive damages.

Attorneys for Navistar tried to get the judge to disapprove and vacate the jury’s verdict. After reviewing the verdict, the judge pointed out the “shocking” testimony heard by jurors. The judge also referred back to testimony where Navistar was essentially “bragging” about its work with the military and “what kind of money they generated for various things.” Regarding the reprehensibility of Navistar’s conduct, the judge called it “egregious and reprehensible,” further confirming punitive damages in favor of Milan.

In addition to actual damages and punitive damages, the court added more than $1 million in attorneys’ fees to the award since Navistar was found to violate the Tennessee Consumer Protection Act.

Navistar comment

Navistar gave Land Line the following statement:

“We're disappointed in the jury’s verdict and we will be filing an appeal. We have successfully defended similar claims regarding our MaxxForce 13 engines in several other jurisdictions, including dismissal of claims of fraud in courts in Texas, Wisconsin, Michigan, Indiana, Alabama and Illinois. Navistar respectfully disagrees with judge’s characterizations of Navistar’s conduct and the plaintiff’s characterization of its employees. Navistar has and will continue to defend our products, our reputation in the market, and the integrity of our employees.”

Clay Miller of Miller Weisbrod told Land Line that the appeal is still pending, and he expects an opinion from the court late in the year.

 

 

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